The thought of automating your accounts payable (AP) processes can seem like it’s more hassle than it’s worth. However, by automating foundational checks like the 3-way match, modern platforms like Vroozi help organizations ensure accuracy, prevent overpayments, and strengthen financial controls from the start.
This guide explores the challenges of manual 3-way matching and explains how AP automation transforms your financial operations into a source of efficiency and strategic value.
Understanding the 3-Way Match Process
A 3-way match is a fundamental accounting control that verifies invoice details before payment is approved. The process confirms that what was ordered, what was received, and what was invoiced are all in agreement.
Vroozi achieves this by comparing three key documents:
- Purchase Order (PO): The official document confirming the items, quantities, and prices your organization agreed to purchase.
- Goods Receipt Note: The record confirming that the goods or services were received as expected.
- Supplier Invoice: The supplier’s bill requesting payment for the delivered goods or services.
In the instances where these three documents match, the invoice is approved for payment. This process protects the business against fraud, duplicate payments, and unauthorized purchases, guaranteeing both financial and operational accuracy.
The Challenges of Manual 3-Way Matching
When performed manually, the 3-way match process can introduce significant errors, delaying the AP operations. Teams often struggle with paper documents or disconnected digital systems, which makes it difficult and time-consuming to find and compare the necessary information.
Manual data entry is prone to inconsistencies and typos, which cause delays and require lengthy investigations. As a result, exception handling becomes a major time drain, slowing down the entire payment cycle. The automated alternative offered by Vroozi avoids these errors.
How AP Automation Streamlines the 3-Way Match
Automated systems instantly match documents, allowing the vast majority of invoices to be processed without any human intervention at all. AP automation transforms the 3-way match from a tedious manual task into a seamless, touchless workflow.
Vroozi’s AI-driven technology extracts invoice data and compares it with PO and goods receipt records in your ERP. The system automatically approves matching invoices for payment and flags any discrepancies for review. This combination of AI and human oversight for exception handling demonstrates a powerful collaboration, leading to fewer errors than systems that rely solely on either AI or manual processes, dramatically accelerating approval cycles.
Manual vs. Automated 3-Way Match
| Category | Manual 3-Way Match | Automated 3-Way Match |
|---|---|---|
| Accuracy | High error rate | Near-perfect matching |
| Processing Speed | Slow, multi-day | Real-time or same-day |
| AP Workload | High manual effort | Exception-only handling |
| Visibility | Limited | Full transparency across documents |
| Compliance | Hard to enforce | Automated policy adherence |
| Cost | Higher operational cost | Lower cost per invoice |
Benefits of Automated 3-Way Match for AP and Procurement
Automating your 3-way match process delivers powerful benefits for both AP and procurement teams. Here are 3 key benefits of 3-way matching with Vroozi:
- Minimize discrepancies to reduce the risk of overpayments and strengthen financial controls.
- Accelerate invoice throughput to improve cash flow predictability and capture early payment discounts.
- Enforce purchasing and receiving policies automatically, ensuring organization-wide compliance.
Best Practices for Implementing Automated 3-Way Match
To maximize the benefits of AP automation, it’s important to follow a few best practices:
- Clean Data: Ensure your PO and receipt data are accurate and complete to reduce the number of initial exceptions.
- Standardize Invoicing: Work with suppliers to establish clear, standardized invoicing requirements.
- Set Tolerances: Configure automated approval thresholds for minor discrepancies in price or quantity to further streamline processing.
- Monitor Performance: Use Vroozi’s dashboards to track key metrics like match rates and exception reasons to continuously improve your process.
FAQ: Automating 3-Way Match
Q: What documents are involved in a 3-way match?
A: A 3-way match compares a purchase order (PO), a goods receipt, and a supplier invoice to ensure all details align before payment is made.
Q: How does automation improve accuracy?
A: AP automation eliminates manual data entry and validates information instantly. By flagging mismatches, it prevents incorrect or fraudulent payments before they happen.
Q: Can an automated 3-way match integrate with my ERP?
A: Yes, Vroozi’s AP automation procure-to-pay platform has a snap-on architecture designed to connect seamlessly with leading ERP systems, enabling real-time data synchronization and matching.
Q: What happens when there’s a mismatch in the 3-way match?
A: Vroozi automatically flags mismatched invoices and routes them for exception handling, where AP teams can investigate, correct, or escalate based on the discrepancy.
Q: Does automating 3-way match help with audit readiness?
A: Yes, automation creates a clear digital audit trail, reduces errors, and simplifies financial reporting, which supports faster and cleaner audits.
Take Your AP Processes to the Next Level with Vroozi
Switching from a manual to an automated 3-way match process is an efficient step in building a resilient finance function. By taking advantage of AP automation, your business can eliminate errors and accelerate payment cycles.
Vroozi’s marketplace-first model is simple to use, with high adoption rates. Our snap-on architecture means there is no need for complex rip-and-replace processes.
Ready to see how Vroozi’s procure-to-pay platform can revolutionize your AP operations? Schedule a personalized demo today and discover the power of touchless invoice processing.
